Dr. Yellen boasts a distinguished career in academia and public policy, but in many ways she is the quintessential government economist. She wholeheartedly believes that a capitalist economy left alone will not tend to maintain full employment levels of output.

Further, she believes that policymakers can optimally intervene to fix the problems with the capitalist economy.

That runs up against a problem F.A. Hayek noted in his 1974 Nobel Prize lecture. Such macroeconomic demand management and fine-tuning require a level of knowledge beyond the cognitive capacity of even the most sincere and brilliant economic administrators.

Burt Abrams’s new book, The Terrible 10 – which I read in manuscript – is out. Here’s the publisher’s blurb:

The U.S. economy made impressive gains in the 20th century, but this progress makes it easy to forget a harsh reality: Americans were also the victims of disastrous government policies that cost trillions of dollars in wasted resources, created mass unemployment, and kept millions in poverty who otherwise could have participated in the nation’s growing prosperity. Government decision-makers, regardless of political party, have tended to favor short-run benefits for friends while imposing costs on current and later generations. The ten worst blunders divide equally among Democrats and Republicans. The Terrible 10 also provides key lessons to help us avoid repeating such policy mistakes in the future.

In the U.S., New York City is probably the most unequal place we’ve got. And I find it striking how many people believe, first, that inequality is terrible, and that this vision for the future is horrible, and, at the same time, think, “Oh, I love New York City!”

We already have places with extreme inequality, but life there goes on, and we don’t recoil in horror. The non-wealthy parts of New York are very vital, and have the best of humanity in them. We have intuitions [about equality and inequality] that are derived from American post-war history. I don’t want to dismiss those intuitions altogether, but I think we need to be more skeptical of them.